Indian businessmen make it big in Britain

Indian businessmen, increasingly familiar in British boardrooms, are finally making it big in the capital of the former empire.

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Dick Wilson

July 31, 1984

ISSUE DATE: July 31, 1984

UPDATED: April 24, 2014 15:10 IST

Nobody has really arrived in the world of British business until he has won recognition in the exclusive clubs of the City of London. And Indian businessmen, increasingly familiar in British boardrooms, are finally making it big in the capital of the former empire.

Indra Kumar Sethia, chairman of the House of Sethia, has recently been elected to the Council of the Institute of Directors, whose president is Lord Errol of Hale. So has Narinder Saroop, the smoothest of the British Indian leaders, with an aristocratic visage and impeccable county accent.

The first Asian or Third World executives to be so honoured, they now go regularly to the institute's swank new premises in the former United Services Club in Waterloo Place to confer with their English colleagues beneath portraits of old imperial soldiers - Wellington, Kitchener and Field Marshal Sir Colin Campbell, later Lord Clyde.

R.K. Bagri, president of the Indian Chamber of Commerce in London, has an enterprise that sells on a global basis with a turnover of pound 55 million (Rs 82.5 crore).

Meanwhile, R.K. Bagri, who started Metdist 10 years ago and built it up to a pound 55 million-a-year (Rs 82.5 crore) business, has been gradually climbing the rungs of the tradition-bound London Metal Exchange.

This year he was rewarded with a directorship, the first Asian or Third Worlder to be thus recognised. Also, Saroop runs the influential Durbar Club, in which most of the big British and Indian businessmen are members, and which has Mrs Thatcher as a patron.

The subcontinent's presence has come a long way from the London branch representatives of old and established Indian houses like those of the Tatas and Birlas. There have appeared in London over the past decade, as Narinder Saroop puts it, "a number of really big businesses owned, managed and headed by Asians in the UK". A conservative guesstimate of the annual turnover of the entire Indian and Pakistani business community in the UK would be pound 3,000 million (Rs 4,500 crore).

Swraj Paul, 53, controls an annual turnover of pound 150 million (Rs 230 crore) and is one of the most successful of the Indian barons. With his engineering background from the Massachusetts Institute of Technology (MIT), he became convinced that there was a market for small- and medium-sized steel pipes of a certain kind. Starting small with a pound 5,000 loan, he moved into the business, and Natural Gas Tubes has invested about pound 6 million and employs some 90 people.

Paul has also formed the Caparo Group, which acts as the private holding company for all the various enterprises which have now come into orbit around Natural Gas Tubes. They cover a wide range of engineering, oil exploration, hotel and property development, tea, shipping and investment companies.

The typical new Indian tycoon in London is a British national, like
Paul, and may have been brought up in England from an early age, or
emerged from the tragic exodus of businessmen from Idi Amin's Uganda. Indra Kumar Sethia has lived in Britain since he was a child of two. He
was trained as a chartered accountant before entering his father's jute, wool and cotton trading enterprise and found himself at only 25 as the
family's choice to take the chair. In the nine years since then he has
expanded the commodity trading base into shipping, insurance,
manufacturing and travel, and brought the annual turnover up to pound
100 million.

I.K. Sethia has expanded the base of his family enterprise into shipping, insurance, manufacturing and travel, bringing the turnover up to pound 100 million (Rs 155 crore).

Abdul Shamji was one of those expelled from Uganda,
where he left behind a considerable empire of trading and manufacturing
enterprises.

Arriving in Britain with virtually nothing except the
clothes he stood in and the credit he had with the banks, he has now
created an even larger empire in England. With hotels, commodity
trading, and manufacturing of vehicles, components and handbags, he
claims a turnover of more than pound 40 million (Rs 60 crore).

Trading under the name of Gomba Group of Companies from an elegant address in Park Lane, Shamji's pet project is his Scottish truck plant of Stonefield Vehicles. He had been assembling cars in East Africa, and is now in the same business for African and Asian markets.

R.K. Bagri, president of the Indian Chamber of Commerce in London, began by running a subsidiary of an Indian trading company but then started his own enterprise, marketing at first in India and the Far East but now selling on a global basis with a turnover of pound 55 million a year.

Saroop, the aristocrat of them all, is a professional director rather than a specialist, sitting on the boards of companies like Capital
Plant International, which specialises in project development and
financing - the Kapuni fertiliser complex in New Zealand being a recent
example. Saroop is also a Conservative councillor in Kensington and
Chelsea and stood as a Tory candidate in Greenwich in 1979.

These
big Indian businessmen are only the flag-bearers of a large number of
much smaller businessmen who have also made their presence felt in
Britain. This writer's local newsagent, one of those countless Patels,
initially commended himself by being the only newsagent in the area who
would offer delivery to the door.

Now he has bought up not only the
neighbouring grocer's shop but also his Italian competitor five doors
away. "In this kind of business you have to work hard for long hours,
and sacrifice your own convenience," he explains. "They wanted to take
their three-week summer holidays, but my wife and I can never do that
together." Now his son is about to start in the restaurant business, at a higher level.

Arriving in Britain with virtually nothing, Abdul Shamji created an impressive empire. With hotels, commodity trading and the like, his enterprises now claim a turnover of more than pound 40 million (Rs 60 crore).

Hard work and long hours mark the success of some of the bigger businessmen too. "We are used to hard work," Bagri of the Indian Chamber of Commerce explains, "and people who work for you are in turn influenced by how hard you work yourself."

Both big and small businessmen also feel at home in a business which they own, where they can be totally committed and motivated, and can communicate that commitment to the people they employ. Paul believes in showing growth and profits by maintaining "the best attributes of a private family company, being modest in our ways and dealing fairly with others".

A common feature of Indian businesses in Britain is that they are
relatively small and family-like in their size of staff. Bagri employs
only 35 (of whom five are Indian), Sethia only 75 (of whom fewer than 10 are Indian). The Lalvanis of Binatone (electronics) employ no relatives at all. Shamji has about 500 employees in the UK, "and all my
executives are British," he says.

But the family interest comes
out when you ask about their sons. "He is my right-hand man," says
Bagri, as if surprised to have to explain. The Sethia son is still at
school, but "we hope he will join the firm", while Shamji's sons are
being groomed at the University of Texas and are hoping to join Harvard. Swraj Paul has his son Akash on the board of at least six of his
companies. Saroop, the lone professional, says drily that his son is
"resting among merchant banks", the latest being Warburg.

But
Sethia is not so successful in keeping his large brood of
entrepreneurial cousins together. His nephew Rajendra went his own way
after taking an economics degree in the late 1960s, building up a
commodity and bookmaking group around ESAL - which is in trouble over
unpaid debts from Africa.

Another nephew, Nirmal Sethia, left Indra
Kumar's House of Sethia in 1977 to form his own N. Sethia London Ltd.
That was soon after two of Indra Kumar's cousins - Ranjit and Sampat -
arrived from India to join the House of Sethia. To add to the confusion, Rajendra, Ranjit and Nirmal are blood brothers, and yet there is no
shared ownership among them.

Many of these successful men have trading as their main activity, but a good number are poised to go into manufacturing in a big way. There
is already an array of Indian ownership of production units: the
Bhardwajs and Chandarias in textiles, the Patels in chemicals, and Paul
in engineering.

Now Sethia is "testing the water" with a small paper
conversion unit at Crayford, and is actively looking for other quoted
companies with a manufacturing base. Bagri's Metdist is also "looking"
for manufacturing investment in the UK.

Narinder Saroop, the aristocrat of them all, is a professional director, a Conservative councillor in Kensington and Chelsea, and stood as a Tory candidate in Greenwich in 1979.

Earlier, the British had seen Indian enterprise in their midst with, for example, Ravi Tikkoo's shipping interests. But he is now in the kinder tax climate of North America, and it is the kind of manufacturing activities that are launched by others that constitutes the more durable investment.

The Indians also have an eye for buying an existing manufacturing enterprise "cheap" from the receivers or off the peg, when a previous owner opts out. The Viranis are now running Belhaven Brewery, and the Okhais the James Keikker jam business. No false pride prevents them from recognising the value of buying from the receiver.

Shamji is linking his Glasgow plant, obtained this way, with his own component manufacture elsewhere; he is diversifying the production line and is winning important defence orders in Malaysia and elsewhere in South-east Asia. In contrast to this pattern, Paul bids relatively high on the stock exchange, and has been able to turn around a number of companies that were earlier in the red.

As Paul says, the British system is tolerant of such take-overs, with procedures more open and transparent than in India. But whereas other Asian investment in Britain - from Japan, Hong Kong, and Taiwan - has been mostly through a new plant or enterprise, the Indian thrust is through the take-over of existing companies, and this is always a little more vulnerable to criticism based on envy, chauvinism or chagrin.

The most interesting case of an Indian businessman in Britain
spreading his wings in India is probably Binatone, run by the two
brothers Gulu and Pratap Lalvani. They left India for training in
England as heirs to their father's pharmaceutical business, and now, 30
years on, they are about to launch a Rs 5 crore consumer electronics
factory outside New Delhi.

They do so with the authority of executives
who have Japanese and Korean engineers working in their own factory at
Milton Keynes (bought from Rank Xerox) to train local British operatives in the assembly of TV sets and similar equipment.

The Asians like the business climate in Britain, finding an "unconscious affinity" with the system here, having been educated on the English pattern and being
familiar with English company law, tax procedures and commercial
practices.

They claim not to be handicapped by racial prejudice. "There
is no organised or deep-rooted prejudice affecting the Asian business
community," Bagri declares. Saroop, who has been involved with this
question politically, puts it carefully but more enigmatically, when he
says that "the degree of racial prejudice is more than can be
identified, but less than people imagine or fear".

Pratap and Gulu Lalvani left India 30 years ago for training in England as heirs to their father's pharmaceutical business. They are now about to launch a Rs 5 crore consumer electronics factory outside New Delhi.

One of the
thousands of British Patels, who prefers to remain anonymous because of
his experiences with British bureaucrats, was also sent for training to a leading British pharmaceutical manufacturer, to be told casually that,
of course, as an Indian he could not expect to reach the higher ranks of the company.

He took the hint and left as soon as he was trained, to
start first a small chemist's shop of his own and eventually a large
pharmaceutical manufacturing company with an annual turnover of pound 15 million. Resentment is one of the possible incentives for this kind of
success, though this man himself is fiercely bitter about being shut out from a rather notoriously cartelised industry.

The position would be better if the Indian business community were more united, but there is much rivalry and jealousy among them. The Sangam group of the Hinduja brothers keeps firmly to itself, tight-lipped and uncooperative.

Saroop tries to keep them all in loose harness in his Durbar Club, while Paul organises the Indo-British Association. There is an Indian Chamber of Commerce in London with Bagri as the current president, but it carries little clout in the highly charged and active Indian businesses and industry in Britain.

Sethia believes that the efforts of the Thatcher administration will soon enable the UK economy to "go through the roof". After 79 years on the slide, he believes the British economy to be on the verge of a renaissance.

The UK, Shamji asserts, has "everything to offer" by way of business opportunities. If the British economy does indeed break through its barriers, those who stand best to gain include the Indians who have in the past decade transformed the British image of the Indian businessman from the High Street newsagent to the Park Lane millionaire.

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